Sarah Garry Nov 3, 2026
Autumn Budget 2026: what it means for brands and their supply chains
The Chancellor’s Autumn Budget, delivered on 28 October, placed a strong emphasis on easing the cost of living and supporting businesses. For brands, the implications extend beyond the headline announcements: changes to import tariffs, wages, business rates and tax administration will affect different parts of the supply chain in different ways.
Alongside the Budget, members will also need to prepare for employment and payment reforms already progressing separately. Taken together, these developments underline the importance of considering the cumulative impact of costs and regulation, as well as the need to maintain fair competition and give businesses the confidence to invest.
The cost of the weekly shop
The Government has identified the cost of the weekly food shop as a priority. From 26 November 2026 until 31 December 2028, it intends to suspend tariffs on 101 selected agri-food products, including some types of baked beans, chocolate, plant-based drinks and dried fruit.
The Government estimates that, combined with an earlier package of tariff suspensions, the measures could reduce consumer costs by £245 million to £595 million a year. This was widely reported as a saving of up to £21 per household per year on food shopping. The figure is an estimate across the two packages and not a guaranteed saving for every household; the actual effect will depend on what people buy and how far reductions in import costs feed through to shelf prices.
For members importing affected products or ingredients, the measures may reduce costs. They could also change the competitive position of UK producers competing with imported goods. We encourage members to check the detailed commodity codes to understand whether their products are covered.
Business rates and warehouse costs
The Budget includes support for eligible retail, hospitality and leisure properties in England. This includes an increase in the thresholds for small business rates relief and a two-year real-terms cap on bills for eligible properties. This real-terms freeze does not necessarily mean that a cash bill will remain unchanged: eligible bills may still rise with inflation.
Members with warehouses and distribution facilities should look carefully at their individual assessments. Warehouses do not automatically qualify for the retail, hospitality and leisure support, and bills will depend on the property’s rateable value, applicable multiplier and any reliefs. Earlier changes to the high-value multiplier have already increased costs for some distribution warehouses.
Pay and employment costs
From 1 April 2027, the statutory minimum hourly rates will increase:
Worker category | Hourly rate |
|---|---|
Aged 21 and over (National Living Wage) | £13.21 |
Aged 18 - 20 | £11.27 |
Under 18 | £8.31 |
Eligible apprentices | £8.31 |
The increase in the National Living Wage is 3.9%, or 50p an hour. Members should consider the direct impact on payroll, as well as potential knock-on effects on pay structures and the cost of manufacturing, distribution and contracted services.
Employment rights: changes alongside the Budget
The Employment Rights Act reforms are separate from the Budget, but are important to business planning. The Government’s updated timetable says that:
Since 30 October 2026, employers have been required to take all reasonable steps to prevent sexual harassment of employees, with new obligations concerning harassment by third parties.
From 1 January 2027, the qualifying period for ordinary unfair dismissal is scheduled to reduce to six months, with changes to compensation.
Further changes, including fire-and-rehire protections and bereavement leave, are scheduled during 2027. The timetable for guaranteed-hours and related shift protections is to be updated following consultation.
Future dates remain subject to parliamentary processes and may change. Members should review the Government’s latest timetable and relevant guidance when planning.
Payment terms and supplier cash flow
The Budget did not announce a new general change to business-to-business payment terms. However, the Commercial Payments Bill, which was already before Parliament, is relevant to brands and suppliers.
As currently proposed, the Bill would introduce a maximum contractual payment term of 60 days, subject to limited exemptions, mandate interest on late payments and strengthen the Small Business Commissioner’s powers. These are proposals, not yet a general rule in force; the Bill’s final wording and commencement dates should be checked as it progresses.
For grocery suppliers, BBG will also monitor how the proposed legislation interacts with the Groceries Supply Code of Practice. Members should continue to consider their existing contractual terms and applicable Code protections; the proposed 60-day maximum should not be treated as permission for a retailer to extend an existing agreed term.
Energy, transport and other operating costs
The Budget extends the temporary 5p-per-litre fuel duty cut and the fuel duty freeze until 1 July 2027, providing some continuity for businesses reliant on transport and distribution.
For eligible energy-intensive manufacturers in Great Britain, applications are open for the British Industrial Competitiveness Scheme, which is due to begin in April 2027. Members should check the eligibility criteria: the support is not available to every manufacturer or energy user.
The Government has also extended selected existing import tariff suspensions relevant to sectors including food and drink, chemicals and plastics. A new application window opens on 11 November 2026 for businesses to suggest new suspensions or comment on certain existing ones.
Packaging and the cost of compliance
The Budget confirms that, from 1 April 2030, mandatory certification will be introduced for mechanically recycled plastic used in plastic packaging for Plastic Packaging Tax purposes. Members affected by the tax should monitor the detailed requirements and consider how they may affect evidence-gathering and supplier relationships. Our separate blog on the impact of overlapping plastic and recycling taxes provides a wider update.
Online sales and tax administration
Members selling through online marketplaces should note that, from October 2027, the Government intends to extend VAT collection responsibilities for online marketplaces to certain sales by UK businesses. The rules include specified exclusions and thresholds, so businesses should check how they apply to their own sales model.
Looking further ahead, VAT invoices are due to move to a specified electronic format from 1 April 2029. The Government has published an implementation roadmap and expects to provide full policy and technical details by April 2028. These changes could affect finance systems, processes and relationships with marketplace operators.
Our position
The Budget includes measures intended to ease pressure on household and business costs, including targeted tariff suspensions and continued fuel duty support. The practical benefit for brands will vary according to their products, sourcing, workforce and operations.
For sustainable growth, brands need more than individual measures: they need a stable, competitive and predictable environment in which to invest, innovate and serve consumers. That means defending fair and effective competition, recognising the cumulative cost of regulation and ensuring that costs are considered across the whole supply chain.
BBG will continue to assess the detail and engage with Government on the issues that matter to members. We would welcome your feedback on how the Budget measures and wider payment and employment reforms, are likely to affect your business.